Full Year 2025 Woolworths Holdings Ltd Earnings Call Transcript
Key Points
- Woolworths Holdings Ltd (WLWHY) reported a 7% increase in group sales, with the Foods business being a standout performer, showing strong month-on-month share gains and positive underlying volume growth.
- The company completed a significant transformation within its apparel businesses, which is expected to drive long-term profitable and sustainable growth.
- Woolworths Ventures, the strategic growth accelerator, delivered mid-teens sales growth and profit growth of over 20%, showcasing the strength of their innovation pipeline.
- The company maintained a healthy balance sheet with net borrowings of ZAR5.6 billion, and a return on capital employed of 16.4%, which remains well above the cost of capital.
- Woolworths Holdings Ltd (WLWHY) has been recognized with several awards, including the Grand Prix Award for the most Admired South African Brand, highlighting the strength and loyalty of its customer base.
- Adjusted EBIT was down 10.9% and adjusted diluted HEPS declined by 19%, indicating a challenging financial performance.
- The Country Road Group in Australia reported an operating loss due to significant organizational restructuring and tough trading conditions.
- The company faced operational challenges in the first half, particularly with new DC technology and late supplier deliveries, impacting product availability.
- Inventory levels increased by 20% year-on-year, raising concerns about potential markdown risks in both FBH and CRG.
- Expense growth in the Woolworths South Africa business was ahead of sales growth, particularly in food, due to various strategic investments and cost absorptions.
Good morning, and welcome to our 2025 annual results presentation. We'll begin this morning with a high-level overview of our performance for the past 12 months, after which I'll hand over to Zaid, our Group Financial Director, who will take you through the financial results for the year in more detail. Following that, I'll provide an update on our strategic priorities and importantly, how we see these evolving into FY26 and beyond and share some thoughts on the outlook before moving. So starting with the FY25 proved to be more challenging than we'd expected. I think we're all okay with the persistent macroeconomic headwinds across our geographies and the significant uncertainty in global trade relations and that was never going to make it easy from a trading conditions perspective.
But to be candid, our financial performance has been more symptomatic of where we have found ourselves as a group in the midst of significant transformation, particularly within our apparel businesses. A transformation, I'm very
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